Planning the Enterprise: Understanding time horizons.

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Enterprise strategies are established to assist in moving towards and achieving defined business visions. These strategies are dynamic and are expected to be refined, over time; changes being driven by market forces, business or technical innovation, new legislative requirements or an evaluation of operational and process performance.

A strategic plan provides the systematic process that defines the activities, sequencing of events, resource needs and the inputs and outputs required to achieve the envisioned futures as described by the enterprise strategy. A strategic plan is always mindful of the bigger picture.

This is in contrast to a tactical plan, which focuses on achieving narrowly defined interim objectives with predetermined means that are not necessarily of strategic benefit.

With a focus on multiple futures the strategy planner will, for every time horizon considered, ask the question: “What must be done to reach this point?”

Establishing a Strategy Plan spanning multiple time horizons provides the opportunity to:

  • Re-assess how things are progressing.
  • Re-baseline through the application of new or changed business drivers.
  • Re-prioritise and re-focus on what is important.

Multiple time horizons and a dynamic Strategy Plan avoids the pitfall of putting “all of the ‘business’ eggs in one basket”

Strategy planning requires rigour and commitment to be applied at every step of the process.

Strategy_Plan_Cycle

  1. Determine starting point: Undertake an honest assessment of business capability as all subsequent decisions to be made are based on how to realistically move on from the defined starting point.
  2. Define Target: Focusing on where the strategy wants to position the business over different time horizons (short term, medium term and long term), clearly aligning with the vision, mission, goals and objectives.
  3. Describe what needs to be achieved: Define the expected objectives and activities needed to be delivered to fill the gap between the starting and target states.
  4. Prioritise and sequence: Assign a priority and a sequence to all activities to be undertaken that delivers maximum benefit to the business.
  5. Identify Accountabilities: Determine who is accountable for delivering on the defined activities and how they should communicate progress.
  6. Execute: Carry out the activities defined within the plan.
  7. Review and Refine: Review the actual outcome assessing the benefits realised and the progress made towards achieving the defined strategic goals and objectives. The strategy plan should be refocused on the next time horizon and refined with lessons learned.

Failing to plan and only focussing on the short term, immediate issues or perceived needs may provide for the ‘instant gratification’ that many businesses seem to require but will more than likely result in longer term loss of benefit.

Not being able to take advantage of future business opportunities by not being well positioned to do so, is common when preceded by the poor decisions that often arise through tactical rather than strategic planning.

A Strategy Plan provides a mechanism by which a business can maintain focus on those things that are ‘really’ important to achieving its vision and avoids the influences and agendas that are often associated with the needs of individuals to achieve short term personal gain.

 

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Developing Enterprise Strategies

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A strategy provides a way to describe how the business is going to get things done. It is much less specific than a plan, which describes who will do what and when. Instead, its purpose is to broadly answer the questions, “How do we get there from here?”; “What approach should we use?” and “Do we know if we have been successful?”

A good strategy will be cognisant of existing barriers and resources (people, money, capabilities, etc). It will also align with the vision, mission, goals and objectives of the business. A business may adopt multiple strategies (Business, Technology, Information, Marketing etc,), each with its own focus but maintaining consistency and alignment with one another, in order to best achieve its goals.

Objectives outline the aims of specific business initiatives and describe what success would look like in achieving the vision and mission. By contrast, a strategy will extend this by describing paths to take and how to move optimally along a road to success.

Why develop a strategy?

The act of developing a strategy provides a mechanism to focus the efforts of a business into deciding what needs to be done in order to realise its vision. In developing and applying a strategy, a business can achieve the following advantages:

  • Improved efficiency in the use of its resources and processes.
  • Increased responsiveness to emerging opportunities.
  • Better identification and management of resistance and barriers to business.

Good distinctive sets of strategies should ensure that a business builds, maintains, and continually strengthens a specific identity in its marketplace.

Strategies become the nuclei around which business and ICT plans are developed. They also provide the framework supporting deviations from the plan and how these can be accommodated.

As well as providing a consistent view of the direction for key business areas, a good strategy should endure, providing continuity in transitioning any given year’s business plan into the next.

A strategy, by addressing multiple time horizons allows a business to readily build upon the accomplishments of the past, without losing sight of the future. Without a clearly defined and actioned strategy a business can easily lose sight of what is needed to achieve its vision. This can occur when it runs into ‘temporary difficulties’, experiences unanticipated change events, or even when ‘rogue management’ starts to ‘do its own thing’.

A business strategy provides:

  • The foundation of a business plan.
  • A framework supporting the governing day-to-day operations.
  • A tool by which deviations from plan can be assessed.

In developing a business strategy an approach to be applied needs to be identified. An approach using techniques such as Innovation, acquisition or diversification can be influenced by:

  • The defined and acknowledged corporate ethics of a business. Ethics define business behaviour.
  • An identified need to engage in growth rather than purely cost containment.
  • The risk profile to be applied. Acceptance of risk will affect business aggressiveness.
  • The time horizons to be addressed. A short term focus can have adverse impact on long term success.
  • The measures needed to assess success.

Strategy_Cycle

Criteria for developing a good strategy

  • Be ever mindful of the vision goals and objectives to be achieved. A successfully implemented strategy will show demonstrable progress.
  • Maximise the use of what is really known. This can be supported through the use of a knowledge repository such as may be found in a well maintained Enterprise Architecture.
  • Provide direction. It should point out the overall path without dictating a particular narrow approach (e.g., using specific vendor solutions).
  • Take advantage of current resources, capabilities and assets.
  • Identify capability gaps that need to be filled.
  • Embrace new opportunities.
  • Acknowledge and be responsive to resistance or even opposition to change. Good strategies attract allies and deter opponents.
  • Address identified issues and problems. Strategies must provide the connection between actions and the benefits to be delivered by a successful implementation.
  • Choose and prioritise initiatives so that maximum long term benefit can be achieved. Avoid the trap of identifying and implementing the ‘quick win’ without first assessing the impact on the long term benefits (or liabilities) that may result.
  • Be clear enough that manageable and unambiguous plans can be formulated.
  • Allow for a feedback loop. No strategy can remain static. Events will occur that affect outcomes. These may in turn affect the vision, mission, goals and objectives of a business. Change can consequently affect both the approach and the priorities of initiatives to be undertaken.

Strategy within the Enterprise is a critical tool to ensuring success. Successfully developed, implemented and maintained, it ensures that a business remains faithful to its vision, minimising the possibility of straying into areas that should not be traversed.

 

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The Enterprising Business: Its all about the people

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Too many enterprises do not appreciate the true value of the people with whom they work.

Regrettably, in the extreme, employees and contractors are regarded as merely commodities that can be exploited when needed or discarded when not. In the worst case scenario people managers are self-obsessed. It is all about what is in it for them. All actions revolve around providing themselves with the greatest personal advantage: frequently looking at the short-term gain rather than the long term benefit.

Progress is often seen as the automation of business systems with the associated reduction in the workforce: the logical but hopefully unattainable goal of being able to either eliminate the workforce and all associated costs or its reduction to being no more than automata.

That there are no fully automated businesses is encouraging, although the trend in that direction is not. Cost reduction rather than growth is frequently the key focus of too many businesses. Doing more with less should not be an end in itself. Waste is undesirable but increasing productivity though overwork is not.

Business systems largely cannot succeed without the skills and knowledge that people bring to the table. It requires people, their vision, knowledge, their creativity and ability to innovate and the richness of their experiences together with their willingness to work to enable successful systems to be enabled in the first place.

Uncertainty cannot be eliminated in a business. There are always unknown variables affecting any given activity. Not all operating conditions can be catered for using technology, so consequently successful businesses are ultimately reliant on the knowledge, analysis, decision making skills and the willingness to contribute of actual people.

Key points when considering the true value of people:

  • People have ideas.
  • People are creative.
  • People identify opportunities.
  • People innovate.
  • People anticipate, recognise and assess risks.
  • People can accommodate change.
  • People make decisions machines follow rules.
  • Where there is no rule defined, people can use their initiative.
  • People are not machines and cannot be treated as such.
  • People are much more than the jobs which they do.

It is essential to acknowledge that individuals have their own needs and aspirations. Treating them respectfully as assets, will engender satisfaction and loyalty resulting in business benefit far in excess than would be available to the alternative.

Dehumanising the workforce and applying processes that feed the lowest common denominator by not recognising the needs of the individual can be expressed through:

  • Demonstrating a lack of respect by not using manners. Always ‘telling’ rather than ‘asking’ shows a lack of common courtesy.
  • Providing no mechanism for allowing considered opinions or feedback to be offered on activities undertaken, removes to opportunity for valuable process improvement and more insightful decisions.
  • Requiring that people will work on demand at any time and reinforced through an expectation that phone calls and emails will be acknowledged and responded to at all hours. A private life should not be regarded as an optional extra.

These detrimental behaviours can all foster resentment, low self-esteem, dissatisfaction, disloyalty and inefficiency: all impacting the realisation of on-going business benefit.

A successful enterprise will truly value its people.

It will:

  • Appreciate that each individual is unique and may respond to different stimuli in different ways. Flexibility in dealing with individuals is important.
  • Recognise that individuals have knowledge. skills and experiences that extend beyond the boundaries of the roles to which they have been assigned and be prepared to leverage them.
  • Accommodate the fact that most people work to live and have a life outside of the workplace.
  • Be cognisant of and acknowledge the value, both privately and publicly, that both individuals and groups provide.
  • Providing feedback through positive reinforcement and constructive criticism where appropriate increases the feeling of self-worth and the feeling of appreciation in the individual.
  • Realise that without people the enterprise does not exist.

Without people an enterprise cannot flourish. Without people the enterprise has no purpose.

With people properly recognised as being the assets they truly are, the enterprise may realise its full potential.

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Governing the Enterprise

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GovernanceThe business enterprise will always benefit from being governed well.

This has been stated so often that the application of a governance regime should be second nature. Why is it that although most businesses accept the intent of governance, the supporting processes require such frequent revision?

Business governance should not merely be perceived as the annoying watchdog that gets in the way of doing business. It should be regarded as the aggregation of those business ideals and processes, used to steer the business towards effectively and efficiently achieving its goals and objectives.

Effective governance of the business enterprise requires a broad focus. It may be applicable to:

  • Externally imposed rules and regulations (legislation)
  • Standards (internal and external), business architecture and principles
  • Policies
  • Technology
  • Budget/Finance
  • Occupational Health and Safety
  • The environment
  • Organisational behaviour (bullying, harassment, collaboration, etc.)
  • Business and personal ethics
  • Business strategy
  • Decision making

Governance provides the capability to oversee and guide a business towards its desired outcomes. It provides both the framework and the rules within which the business operates. Governance requires full cooperation within the business in general and individuals in particular, in accepting the need to comply.

Whilst appropriate compliance of defined business rules leads to positive business outcomes, conversely, non-compliance can result in chaos expressed by:

  • Inefficiency
  • Market failure
  • Cost blow-outs
  • Organisational dysfunction
  • Corruption and loss of reputation
  • Deregulation and litigation

When appropriately adhered to, compliance can ensure:

  • Efficiency
  • Market success
  • Cost containment and business growth
  • Organisational well-being
  • Business integrity and a good reputation

Human nature suggests that compliance may not occur unless there is some personal benefit to be had from the act of complying.

In a business setting it is essential that governance is associated with well understood consequences for both compliance and non-compliance. The ‘carrot and stick’ approach is one that would seem to be effective.

Appropriate rewards can be given for complying. These may be as simple as providing a safe and happy workplace, motivation and public recognition and acknowledgment of the act of compliance and providing increased remuneration.

Fitting penalties can be imposed through loss of personal integrity, prestige and responsibility, loss of promotional opportunities, loss of job or criminal prosecution.

Governance requires compliance to be effective. This will not occur unless the consequences of both compliance and non-compliance are well understood and followed through. An absent or inadequate governance regime significantly reduces the opportunity for business growth. Neglecting to administer or reinforce both positive and negative consequences are all too frequently responsible for business mismanagement and failure. Consequences are a vital cog in keeping the mechanisms of compliance and governance successfully functioning.

Governance and a continuous measuring of its effectiveness, allows the business to refine its operating model and establish and culture of continuous improvement. Good governance should be regarded as a business asset, which should be fostered and encouraged to yield all the benefits its existence permits.

 

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Enterprise Architecture – Untangling the Business.

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PipesBefore engaging in business change, there is a need to understand where and how the business is situated. Executing change without this understanding can result in unintended and perhaps disastrous consequences.

When renovating an older property, It is rare that the original detailed plans and specifications are available to the project manager. This creates a potentially significant problem, with regards to the structural, plumbing and electrics and needs to be resolved prior to starting.

Attempting to excavate, remove walls or ceilings without knowing what lies beneath or inside, increases the risk of severing vital services necessary to the facility of the property. With knowledge of what is where, mitigating activities can be undertaken to avoid accidents. Rupturing a gas or water line, shorting an active electrical cable, disturbing asbestos or removing a load-bearing beam, could have serious consequences, lengthening time-frames, impacting structural integrity, dramatically increasing costs and placing safety at risk.

The competent building renovator, in order to effectively, efficiently and safely make the planned alterations, needs to undertake adequate investigations and preparatory work prior to commencing. Within a business context, it is likewise vital for the change-agent to make requisite enquiries and preparations. Applying change, without appreciating the consequences, is unproductive, potentially costly and may have disastrous ramifications for the whole business.

As in ‘the domino effect’, all change will impact at least some other part of the business. When modifying the function of a business system, it is imperative to understand the flow on effects. Asking questions before commencing, such as:

  • What data is being changed?
  • What other systems use this data?
  • If this is changed will something else break?
  • What else is affected by changing functionality?
  • Will the current business processes continue to work?
  • What else needs to be altered to support this change?

These answers are essential to provide insight into the impacts and tasks required in order to minimise any collateral damage. Similarities between the renovating analogy frequently occur within the business context, when the answers to these questions are not known and may require a significant investigation. Depending on the size and nature of the business, this vital enquiry may prove to be not only frustrating but also a lengthy and costly process.

Technology has long since supplanted most formerly paper-based data, yet storage and transfer of this information has often been haphazard. The consequence of rapid technological development means replacing both superseded software and hardware may often create issues of a chaotic approach to data content, context, storage and access. Ignoring or procrastinating resolving this problem only broadens the scale of ramifications as the business expands, weakening both its functionality and growth potential.

With a competent business infrastructure in place, the necessity and consequences of such complex investigations can be avoided. To better facilitate the change process, the advantages of an established Enterprise Architecture and associated knowledge base can be exploited. Having available comprehension of:

  • What is physically connected to what.
  • What are the information flows.
  • Why connections are configured as they are.
  • Who uses which systems and processes and why.

The benefits of an established Knowledge Repository supported by functioning and utilised Enterprise Architecture considerably eases the change process, providing enhanced business opportunities for growth.

Like the successful renovator who understands the complexities of the structure in which they are working, the change-agent within a business enterprise will benefit from understanding how the business is structured and why.

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